Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, plans to build two more advanced chip packaging plants in southern Taiwan, adding to its footprint at the Chiayi Science Park.
The expansion was disclosed by an official from Taiwan's National Science and Technology Council, according to reports from outlets including The News International and Morningstar. Morningstar reported that the additional facilities are intended to help meet demand tied to artificial intelligence.
The two plants focus on advanced packaging — the process of assembling and connecting finished chips into higher-performing modules. That step has become a bottleneck for the powerful processors used to train and run AI systems, so packaging capacity is now nearly as strategically important as manufacturing the chips themselves.
The news lands alongside strong financial results. TSMC posted a 36% jump in first-half revenue, a figure attributed by Anadolu to robust demand for advanced AI chips. Yahoo Finance and Business Standard reported that TSMC's second-quarter revenue rose 36% from a year earlier, beating market expectations and setting a record. Crypto Briefing separately reported a 68% revenue surge for June 2026, also driven by AI chip demand.
The move signals continued concentration of cutting-edge chip production in Taiwan, and specifically in the island's south, even as governments elsewhere push to build up domestic semiconductor capacity. Chiayi is emerging as a hub for the packaging work that turns silicon into the finished components AI hardware depends on.
Why it matters: The chips that power the AI boom can't reach data centers without advanced packaging, and TSMC's decision to expand that capacity in Taiwan shows how much of the world's most critical technology still runs through a single island.